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Return to Previous PageLaw Caps PSE’s Profits From Lake Tapps Water Plan

By Doug Sutherland and Jad Shabro
The New’s Tribune

The proposal by Puget Sound Energy to divert a portion of the Lake Tapps-White River Project water currently used for hydroelectric generation to a potable water supply is both creative and complex.

The July 16 Perspectives article by Jeff O. Johnson, a graduate student in environmental studies at The Evergreen State College, illustrates how misunderstandings can result because of the complexities of the issue.

Johnson’s main point is that issuing a water right to PSE would translate to immense profits for PSE and its shareholders. This concern is reasonable but does not consider the fact that the Washington Utilities and Transportation Commission strictly regulates PSE.

The commission sets rates that allow private utilities to earn approximately 9 percent return. Any revenue from the White River project exceeding operating costs plus a 9 percent return on capital assets would benefit PSE ratepayers through lower electrical rates. PSE electricity customers, not PSE, would be the beneficiaries of water sales.

Future water supplies are very limited and expensive. Cost estimates for the City of Tacoma’s Pipeline 5 to provide 64.6 million gallons of water daily to Seattle and South King County are estimated at $240 million. This proposal would deliver a like amount of water per day close to the urban growth centers of Tacoma and Seattle, where it’s needed. Because of the evergrowing need for water, Seattle and Tacoma are not considering this new potential water source as a competitor.

Johnson expresses understandable concern about impacts on salmon. Puget Sound chinook salmon would actually benefit from PSE’s proposal.

The Lake Tapps Task Force, made up of Lake Tapps area homeowners, PSE and local, state and federal officials, is developing a plan that would increase the amount of water allowed to flow freely down the White River, rather than being diverted into Lake Tapps for power generation. Fisheries biologists believe the increased flow would help enhance the river’s fish populations.

The use of Lake Tapps as a reservoir for potable water complements other existing and future uses of the resource. Lake Tapps would remain viable as the state’s fourth largest regional recreational resource and as a significant wildlife and fresh water fisheries habitat.

And finally, if PSE and the Lake Tapps Task Force cannot find a way to make the Lake Tapps White River project economically viable PSE can refuse to accept the license terms proffered by the Federal Energy Regulatory Commission These terms would cost PSE an estimated $35 million to $80 million over 20 years.

It would be reasonable to assume that PSE would retire the project and purchase lower-priced electricity elsewhere. The lake would go away, homeowners throughout the area could see increased property taxes to compensate for lakefront home devaluations, PSE and federal fish-enhancement efforts would be compromised and this wonderful regional recreational resource would be lost to Pacific Northwest families.

These are among the reasons that the Lake Tapps Task Force prioritized the PSE potable water application as the most potentially beneficial of 34 options reviewed tonhelp resolve the Lake Tapps situation.

Jeff Johnson is right on target in advocating that the Northwest’s finite water supplies balance the needs of both people and fish. It is toward this end that Lake Tapps area homeowners, PSE and government officials are working collaboratively to resolve this very complex matter.

The News-Tribune
Tacoma, WA
September 3, 2000

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